Canadian stocks climb as oils soar

MartinCej

TORONTO (CBS.MW) - Canadian stocks rose Tuesday, led by oil and gas issues after Devon Energy of the U.S. agreed to buy Anderson Exploration for $4.6 billion in cash and debt.

The deal renewed optimism for more cross-border takeovers as U.S. producers scramble to increase their access to Canada's large natural gas reserves.

Stocks were also helped by a surprise jump in the U.S. National Association of Purchasing Management's Index. While the manufacturing sector contracted for the 13th straight month in August, new orders and production finally began to increase after a year of declines. Read the report.

The advance was broad, with gains for the financial services sector, communications and media, real estate and pipelines.

The S&P/TSE 60 gained 1 percent while the Nasdaq Canada index, a collection of Canadian companies that trade on the U.S. based Nasdaq market, fell 2.7 percent, led by JDS Uniphase
JDSU
PMC Sierra
PMCS
and Research In Motion
RIMM
The CDNX Index of small technology and natural resource companies that trade on the Canadian Venture Exchange slipped 0.6 percent.

Shares of Anderson Exploration jumped 50 percent Tuesday after Devon Energy said it agreed to buy Anderson for $4.6 billion in cash and debt, creating North America's largest independent producer of oil and natural gas.

Devon
DVN, +0.71%
said Monday that it agreed to pay 40 Canadian dollars ($25.79) for each share of Calgary-based Anderson, representing a 51 percent premium to Anderson's closing price of $17.07 on Friday. Devon will also assume about $1.2 billion in Anderson
AXN, +19.82%
(AXL) debt.

Anderson shares soared $8.34 to $25.41 in New York while its Toronto-traded shares climbed C$13.21 to C$39.61. Shares of Oklahoma City-based Devon fell $2.41 to $43.86. See full story.

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